Travelport profits down but 'making progress', says chief

Travelport saw income and profits dip in 2011 despite net revenues rising 2%, the GDS has revealed in its annual results.

A fall in fourth quarter operating income of 91% to $4 million and EBITDA (profit before tax and other costs) of 38% to £62 million came as Travelport incurred a $35 million exceptional charge.

This was “resulting from the final resolution of two historical disputes related to now terminated arrangements with firmer distributors in the Middle East, which were subject to binding arbitration”.

Consequently Travelport’s full year operating income come in at $200 million and EBITDA at $427 million a decrease of 27% and 12% on 2010 respectively.

Travelport said excluding the impact of an employee incentive plan adjusted EBITDA for the fourth quarter and the full year was “consistent with the prior year”.

Full year adjusted EBITDA was $504 million compared to $545 million in 2010 and for the fourth quarter $106 million compared to $115 million.

Gordon Wilson, president and chief executive, of Travelport, said: “2011 financial results were in line with expectations.

“Total transaction value for air travel and hotel sales was 6% higher at $83 billion, and we launched and deployed four significant, innovative new products designed around our new technology platform.

“We are making excellent progress on our strategic plan, delivering the broadest possible travel content for suppliers and travel agency customers to buy and sell products.”

Fourth quarter performance was said to have been particularly bolstered by increased volumes of in the Americas and the Middle East and Africa.

Revenues for the quarter were 3% higher than the equivalent three months to the end of December due to a $10 million increase in transaction processing and 2% increase in segment volumes.

Full year performance saw a $26 million incremental increase in transaction processing and a $13 million increase in airline IT Solutions revenue, Travelport said.

In Europe operating income was up marginally in 2011 by 1% to $85 million.